Industry And Cluster | News & Insights

Chinese International Business news

Published: March 7, 2020

1. China first-quarter economic hit from coronavirus looking more severe: Reuters poll

The coronavirus likely halved China’s economic growth in the current quarter compared with the previous three months, more severe than thought just three weeks ago and triggering expectations for earlier interest rate cuts, a Reuters poll found. 

The March 3-5 poll of more than 40 economists, based both in and outside mainland China, forecast growth to fall to a median of 3.5% this quarter from 6.0% in the fourth quarter of 2019, a full percentage point lower than predicted in a Feb. 14 poll. 

The range of views was wide, from two banks saying no growth at all to one saying 5.0%.  Under a worst-case scenario, the median forecast for Q1 was 2.4%, compared with 3.5% in the previous poll – essentially meaning the worst-case view from three weeks ago is now the central scenario for private sector economists.

2.  Coronavirus raises threat of China developer defaults

China’s weakest property developers risk defaulting on their US dollar bonds, as home sales suffer and access to cash dries up due to the coronavirus outbreak, reported the Financial Times. 

Defaults on dollar bonds by Chinese issuers are rare and missed payments by developers have been almost non-existent in recent years, even as overall corporate defaults in the country hit a record high in 2019. 

Several midsized groups cash flows’ are now being squeezed while being shut out of the market to refinance existing debts. Developers must pay about $20 billion in maturing US dollar bonds this year, according to data from Dealogic. They raised a record $22 billion in the first two months of the year, topping the previous high in 2019 when developers more than doubled US dollar issuance.

“The only way to survive is to have a lot of cash on hand right now,” said Cheong Yin Chin, a senior China property analyst at CreditSights in Singapore.

3. China’s top natural gas buyer cancels imports after epidemic hurts demand

China National Petroleum Corp.invoked force majeure on all natural gas imports, according to Caixin sources, the second Chinese buyer to refuse shipments in a sign that global commodity flows may face sustained impact from the coronavirus epidemic, reported Caixin.

CNPC, the parent of PetroChina Co., took the extreme step after initially working with sellers to reschedule shipments and plans to cancel contracted deliveries of the fuel both as liquefied natural gas and via pipelines in the short term. At least one LNG supplier was notified.

The nation’s buyers have struggled with the impact of the virus, which has cut demand for fuel and maxed out gas storage space. Companies declare force majeure when they’re unable to meet contractual obligations for reasons beyond their control.

China’s biggest suppliers of LNG include Australia, Qatar and Malaysia, while Russia and Central Asian nations — Turkmenistan, Kazakhstan and Uzbekistan — as well as Myanmar supply via pipeline.of Industry and Information Technology could access the cheap funding from the state lenders. 

4. China’s central bank resists large-scale coronavirus stimulus

Chinese stocks hit a two-year high on Thursday as investors anticipated a fresh stimulus push from the People’s Bank of China, and in a front-page commentary earlier this week the official China Securities Journal noted that the surprise decision to reduce US interest rates by half a percentage point had “opened a window” for the PBoC to adjust rates as well, reported the Financial Times.

But there has been no hint of any big-bang surprise from the PBoC, which subsequently said it would not issue any “short-term stimulus” measures to boost the property sector, one the country’s most important economic engines. 

“Liquidity seems to be broadly ample and the financial plumbing continues to function. You don’t want to go beyond that,” said one adviser to China’s central bank.

That is in sharp contrast to other affected countries — both South Korea and Italy have launched fiscal stimulus packages to help deal with the economic consequences of the virus.

5. China’s among first to launch passenger-carrying Robotaxi service

Chinese autonomous vehicle startup has announced it has launched “robotaxi” services with limited routes in a US city, becoming one of the first companies to carry passengers in autonomous vehicles, reported Caixin.

The service, named PonyPilot, went online Feb. 25 in the city of Fremont, California, the company said in a public WeChat post on Wednesday. For now, it is only available to local government employees and is restricted to fixed routes connecting the city’s train station with some municipal buildings such as the town hall.

City staff are able to hail taxis equipped with’s own self-driving system using the PonyPilot app, the company said, adding that it will evaluate the service and consider expansion into other parts of Fremont. 

Since 2018, has been testing a fleet of 100 autonomous cars in Beijing, Irvine, California and the southern Chinese city of Guangzhou, where the company is based. 

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